Monday, July 9, 2012

McHenry: Is the CFPB Free from Executive Control?

Representative Patrick McHenry, chairman of the Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs, wrote a letter to CFPB Director Richard Cordray raising concerns about the CFPB’s relationship with the political components of the executive branch. McHenry questioned the frequency of CFPB staff interaction with the White House and whether the CFPB “is in fact free from executive control.”

The Dodd-Frank Act established the CFPB as an independent bureau within the Federal Reserve System to regulate consumer financial products and services under Federal consumer financial laws. In his letter McHenry questions the CFPB’s independence.

The CFPB occupies a position within our government in which “its duties are performed without executive leave and…must be free from executive control.” [However,] the CFPB has maintained a close relationship with political components of the executive branch.

Although employees of other independent agencies meet with White House staff members…the frequency of the CFPB’s visits and the CFPB’s coordinated public events with the White House could suggest that the Bureau’s regulator actions are indirectly shaped by these interactions.

McHenry continued by urging the CFPB to carefully evaluated its relationship with the political components of the executive branch. He also requested the CFPB answer a number of questions to assist the Subcommittee in fully examining the extent and nature of the CFPB’s relationship with political components of the executive branch.

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